RBI Demands Evidence of Cyber Compliance from Banks Amid Increasing Cyber Attacks
NEW DELHI: The Reserve Bank of India (RBI) has mandated banks to enhance their cybersecurity protocols in response to a surge in cyberattacks targeting financial institutions. Sources familiar with the matter revealed that the central bank is particularly focused on the security of application programming interfaces (APIs), which connect banks with non-bank lenders and fintech companies. The RBI has also requested banks to provide details on their strategies for mitigating risks associated with artificial intelligence (AI), as hackers increasingly employ advanced tools to compromise financial systems.
Despite existing directives aimed at managing cybersecurity risks, the implementation by banks has been deemed insufficient. A consultant working with leading banks indicated that the RBI is now intensifying its push for stronger adherence to these requirements. The regulator’s concerns are heightened by the perception that smaller lenders and non-bank entities are more vulnerable to attacks, making them attractive targets for cybercriminals.
Recent cyber incidents put lenders under scrutiny
These heightened cybersecurity measures come in the wake of several recent cyber incidents within India’s financial sector. The State Bank of India, the country’s largest lender, reported a data breach affecting approximately 3,900 customers. The bank is currently investigating the incident but has yet to determine the source of the vulnerability.
Additionally, two non-bank lenders in Mumbai experienced losses totaling around $2 million due to unauthorized transfers linked to compromised API connections with ICICI Bank. The hackers exploited these connections to issue loan disbursal instructions, leading to significant financial losses. In response to these threats, India’s cybersecurity agency, CERT-In, issued a warning about the theft of banks’ API credentials and conducted cybersecurity training for over 300 officials from more than 55 financial institutions.
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